Airlines are Making More with Ancillary Fees
All those fees for services and amenities that were included in your airline ticket including baggage (although Southwest Airlines lets you check two bags free and your first checked bag fee is free with JetBlue Airways), seat assignments, meals, in-flight entertainment and etc. are adding up.
The number of airlines charging those bag fees increased from 23 to 47 last year, according to an annual study by Amadeus, a major global distribution system.
Fee revenues were up 38 percent to $21.46 billion. And for a few airlines, ancillary fee revenue now generates nearly 30% of their revenue. Topping that list: vacation carrier Allegiant Air, 29.2%; Spirit Airlines, 22.1%. (Source: Amadeus press release).
What Bothers Air Travelers Most - Fees and Discomfort
All those fees and lack of comfort are sore points with air travel consumers and it’s why some people are traveling less, according to a Consumer Reports survey.
Eight of ten major airlines got low grades on seat comfort and several others got low marks for cabin crew service, cleanliness and in flight entertainment. Two exceptions: Southwest Airlines and JetBlue Airways.
Southwest got top marks for check in and cabin crew; JetBlue scored tops on seating comfort. US Airways scored lowest overall and has the worst marks for cabin crew service.
Flyers were also unhappy about service fees: 40% of those who say they’re flying less blame fees. The fewer fees airlines charged, the happier passengers are and, interestingly enough, both Southwest and JetBlue are stable on bag fees. (Source: Consumer Reports press release).
More People Will Take to the Skies This Summer
The Air Transport Association of America is projecting that about 1.5% more people will fly this summer than did last year, to the tune of 2.24 million people in the air every day.
The ATA predicts that 206 million passengers will fly between June and August 2011. That is well below the pre-recessionary high of 217 million in the summer of 2007. (Source: ATA press release).
Airfares Rose in Fourth Quarter 2010
Average domestic airfares rose to $337 in the fourth quarter of 2010, up 5.2 percent from the average fare of $320 in the fourth quarter of 2009, according to the U.S. Department of Transportation.
Newark-Liberty, NJ, had the highest average fare, $461, while Atlantic City, NJ, had the lowest, $156. Despite that increase, airlines are correct in saying that, long-term, fares are staying low.
The DOT calculates that in 1995 dollars, the average airfare in the fourth quarter of 2010 was $236, compared to $288 in 1995 and $300 in 2000. Adjusting for inflation in 1995 dollars, fares in 2010 averaged $235, up 6.7 percent from 2009 but down 21.6 percent from the inflation-adjusted high of $300 in 2000. (Source: DOT press release).
Tarmac Delays Keep Decreasing
Here is some good news for flyers. March was the fourth month out of the last six that the nation’s airlines reported no tarmac delays of more than three hours, according to the Air Travel Consumer Report just released by the U.S. Department of Transportation (DOT).
A year ago, in March 2010, the carriers reported 25 tarmac delays longer than three hours. Carriers also reported a decrease in the rate of canceled flights in March compared to a year earlier. (Source: DOT press release).

North American Carriers Are Single Bright Spot in Dismal Global Aviation Market
The International Air Transport Association revised its outlook for global aviation last month, forecasting $4.7 billion loss for 2009, a bigger loss than the $2.5 billion it projected in December. But it said that North American carriers were doing the best and forecasting a $100 million combined profit for the year for them.

IATA said they had matched a 7.5 percent fall in demand with 7.5 percent in capacity cuts. It also said they benefited management and lower spot fuel prices. The current economic turmoil is hitting Asia Pacific carriers the hardest.

The Middle East is the only region to see demand grow, and capacity grew more. European carriers are expected to lose $1 billion. An expected 2.9 percent drop in the Europe’s GDP probably will cause demand to drop 6.5 percent. (Source: IATA press release).

New Delta signs are now up at more than 400 ticket counters, gates and baggage claim areas at three hub airports in Detroit, Memphis and Minneapolis-St. Paul. Delta has already rebranded 119 other airports worldwide.

By the end of next year, all Northwest planes will be painted Delta colors.
The two carriers have already synchronized flight schedules and route maps. (Source: Delta press release).

Delta Offers Up To Triple Miles through June 15
Delta Air Lines is offering SkyMiles and Northwest WorldPerks members up to triple flown miles toward elite status on select fares purchased for travel through June 15.

Travelers will earn triple miles on first, business and premium economy fares; double miles on discounted economy fares. Travelers will earn actual miles on deeply discounted fares.

The bonus applies only to miles counting towards Medallion or Elite status. Medallion and Elite Qualification Segments—another way to qualify for elite status—are not included.

American to Install Wi-Fi on 300 more Planes over Next Two Years
It’s getting easier to stay connected in flight. American Airlines will install Gogo Inflight Internet on more than 300 domestic aircraft over the next two years.

It already has Wi-Fi on 15 of its 767-200s, which are primarily used on nonstops between New York’s JFK and San Francisco, Los Angeles and Miami.

It will install the service on 150 MD-80 aircraft this year and then move on to its Boeing 737-800 fleet. The cost is $12.95 for flights more than three hours, $9.95 for flights three hours or less and $7.95 for a pass for customers using a handheld device on flights of any length (Source: American press release).

It’s already in place at several other Southwest airports, including Baltimore/Washington International, Dallas Love Field, Phoenix Sky Harbor International, Orange County John Wayne, Denver International, San Francisco International, and Los Angeles International. It will continue to add it as needed. (Source: Southwest press release).

Amtrak Offers Lower Acela Fares
Amtrak is offering new low fares on Acela Express trains, saving passengers up to 25 percent on previous lowest fares. Acela Business class tickets start at $99 between Washington, DC (WAS) and New York (NYP), and $79 between New York and Boston (BOS).

A 14-day advance purchase policy applies, and availability is limited. Fares are available through June 26. The tickets are one-way and nonrefundable, but can be exchanged. (Source: Amtrak press release).

After Month-Long Hiatus, Airlines Try Another Fare Hike
The airfare monitoring website FareCompare.com reported that Northwest Airlines upped its domestic fares by nearly $80 roundtrip in over 4,000 city pairs for both business and leisure travelers.

The increase came after nearly a month of no airfare hikes. Rick Seaney, CEO of FareCompare, said that fares may be topping out, due to a sluggish economy and the fact that oil is down, relatively speaking, to the mid $120s per barrel.

He said revenue from added fees is also kicking in. (Source: FareCompare.com).

Delta Doubles Fee for Second Bag, Northwest Charges for First Bag FF Ticket Delta Air Lines upped its charge for a second bag to $50 from $25. It also said it would increase fees for specialty items that require special handling such as surfboards or ski equipment on domestic and international flights.

The new fees apply to tickets bought after July 31 for travel on or after Aug. 5. First Class, BusinessElite and Medallion customers will continue to be able to check up to three bags at no charge.

Customers checking bags on international flights may continue checking a first and second bag at no charge.

Northwest Airlines instituted a $15 charge for the first checked bagged, following American Airlines, United Airlines and US Airways’ lead; this applied to tickets sold after July 10 for travel starting Aug. 28.

Frequent flier elites are exempt from the policy, along with full-fare coach passengers. As of Sept. 15, it will also begin charging service fees for frequent flyer tickets: $25 for domestic, $50 for transatlantic and $100 for transpacific travel. (Source: Delta, Northwest press releases).

Hawaiian Charges for First Bag, Phone Bookings
Hawaiian Airlines began charging $15 for the first piece of checked luggage on flights between the mainland U.S. and Hawaii; the first bag remains free on interisland flights.

Hawaiian will also begin charging a $10 ticketing fee for telephone bookings for interisland flights, $20 for all other routes and $25 for ticketing at the airport. (Source: Hawaiian Airlines press release).

Flight Attendants Decry Turning Planes into Flying Vending Machines
The Association of Flight Attendants-CWA (AFA-CWA), lamented the fact that US Airways is now charging for soft drinks in flight, saying it was turning aircraft into “flying vending machines.”

The group said the airline is nickel and diming passengers and turning flight attendants, who are safety pros, into cashiers. (Source: AFA-CWA press release).

Delta Restructures Loyalty Program, Upping Some Mileage Requirements

Delta Air Lines said it was restructuring its SkyMiles frequent flyer program, saying it wanted to give its members greater flexibility and more options when redeeming miles, including the ability to again book the last seat on a flight using miles and three redemption tiers for Award Travel within the continental United States, Alaska and Canada..

Tiers will start at 25,000, 40,000 and 60,000 miles round-trip rather than the two current Award levels starting at 25,000 and 50,000 miles for travel within the continental United States, Alaska and Canada. (Source: Delta press release).

Global Air Travel Keeps Falling
IATA (the International Air Travel Association) said that global air travel dropped for the second month in a row, with international passenger traffic down 1.3 percent compared to October 2007. That was a smaller decline than September’s 2.9 percent drop.

North American traffic declined 0.8 percent; Asia Pacific traffic was down 6.1 percent, European traffic was up 1.8 percent. IATA’s head, Giovanni Bisagnani, said that recession is now the biggest threat to airline profitability. (Source: IATA press release).

Fewer Planes in the Air Boost Performance
The airline industry’s capacity cuts, resulting in fewer flights operating daily, have contributed to the improvements in on-time performance shown above.

Notably, in September, when the share of flights arriving on time rose to 84.9%, carriers implemented the bulk of the large capacity cuts announced at the height of the summer’s oil-price surge. (Source: Wall Street Journal)

Trend: Premium Economy Offers More Comfort but Still Coach
As tightening travel budgets restrict first and business class bookings, interest in the premium economy class is resurfacing. A dozen international airlines flying to the U.S. now offer extra legroom, wider seats and seats that recline lower in premium economy cabins at a cost that’s slightly more than coach but notably less than business class. Some carriers even include better meals, early boarding, access to faster airport security lines, and other amenities. (Source: The Wall Street Journal)

United Makes It A Little Easier to Pay Baggage Fees and Buy Extra Leg Room
More airlines are making it a little easier for consumers to pay baggage and other fees.

United Airlines canceled its previously announced plans to increase the domestic second bag fee from $25 to $50 one way, and now lets you pay your baggage fee in advance on its website instead of at check-in. You can now upgrade online instead of at check-in to Economy Plus, which starts at an additional $14 one way for up to five additional inches of legroom. Next spring, your travel agent will be able to book your baggage and upgrade you to Economy Plus.

Northwest Airlines is another carrier that now lets you pay your baggage fee in advance when you check in online; Spirit Airlines discounts your baggage fees when you pay online. Look for more airlines to make it easier to pay a variety of fees in advance, either through your travel agent or on their website. (Source: United, Northwest and Spirit press releases).

Lufthansa Italia
Lufthansa has launched its new Lufthansa Italia, which it is billing as a blend of Lufthansa’s reliability and quality with Italian flair.

It will begin flying a fleet of six aircraft in February between northern Italy and major European destinations.

It ultimately plans to operate its own Italian airline. It will first operate to Paris and Barcelona, and then will add Brussels, Budapest, Bucharest, Madrid, London and Lisbon. (Source: Lufthansa press release).

Delta Realigns Fees
Delta Air Lines, which recently acquired Northwest Airlines, is aligning the fee structures of the two carriers. It has dropped award ticket fuel charges instituted to cope with soaring fuel costs and reduced the cost of telephone reservations from $25 to $20.

It has eliminated curbside check in administrative fees and aligned the two carriers’ baggage fees. In addition, Delta now offers passengers Coach Choice seats for an additional fee when they check in online 24 hours before departure. These are certain aisle, window or exit row seats. (Source: Delta press release).

Hotels

In the wake of American Airlines’ new $15 fee for checking bags, , Loews Hotels has introduced a new “Baggage Buy Back” incentive that will reimburse guests for their $15 checked baggage fee.

Arriving guests simply present any airline bag fee receipt at the front desk to receive the rebate, which will be issued in the form of a credit to their bill at checkout. The Baggage Buy Back rebate is available at Loews’ 18 properties in the U.S. and Canada, from June 15 through Labor Day, Sept. 1.

Loews Hotels will offer credit for up to two bags for a maximum of $30 per occupied room per stay. (Source: Loews press release).

Cars

Airline Loyalty Programs Offering Savings, Bonus Miles to Car Renters Airlines are giving their frequent flyer members a chance to earn more miles or get discounts when they rent cars.

Delta Air Lines and Advantage Rent A Car are partnering to allow SkyMiles members
to earn 200 miles per day on any class of vehicle rental through Advantage. with a maximum of 2,000 miles per rental. Additionally, SkyMiles members may earn up to 6,000 miles for rentals completed through July 13.

Northwest Airlines is partnering with Hertz to allow WorldPerks members to save 50 percent and earning double miles on weekend rentals in the U.S., Canada and Puerto Rico through June 30. WorldPerks members can earn 50 WorldPerks miles per day for Hertz rentals of one to four days, and 500 WorldPerks miles for Hertz rentals of five days or more.(Source: Advantage, Northwest press releases).

Spotlight On…..What You Really Dislike About Flying

It’s not the individual airlines that so frustrate air travelers, according to a new Travel Industry Association survey of air travelers. What irritates you most is the air travel process.

The TIA survey of more than 1,000 air travelers found that the more you fly, the more frustrated you get.

Seventy-eight percent of air travelers believe the air travel system is either broken or in need of moderate correction

Sixty-two percent believe the air travel system is deteriorating

Thirty-three percent of air travelers are dissatisfied with the air travel system and 48 percent of frequent air travelers (those who do five trips or more per year) are dissatisfied

Thirty-nine percent feel their time is not respected in the air travel process and that increases to 51 percent among frequent travelers.

The TIA is blaming flight delays caused by an outdated air traffic control system as a fundamental cause of the aviation industry’s problems and is holding a summit later this money to push Congress to address the problem.

In airlines ongoing quest for additional revenues in the face of $120-a-barrel oil, several network carriers have upped their change fees and re-instituted Saturday night stay and/or minimum stay requirements.

United Airlines increased its change fees by 50 percent to $150 and added a Saturday night stay requirement on routes in about 65 percent of its markets.

Continental upped its change fee to $150 for domestic and $250 for international flights. US Airways upped the cost of its change fees by $50, to $150 for domestic and $250 for international flights.In some instances, top customers, such as elite members of airline loyalty programs, are exempt from these fees.

In addition, United, Delta Air Lines, American Airlines, Northwest Airlines and Continental have instituted minimum stay requirements on all or many of their routes.

Meanwhile, most network carriers and some low cost carriers, including JetBlue and AirTran have added fees for checking a second bag; fees range from$10 to $25. (Source: airline press releases).

Compensation Doubles for Involuntary Bumping
If you’re involuntarily bumped from your flight, you’ll get twice as much as you used to get. Effective this month, if you’re bumped you can receive up to $400 if you’re rescheduled to arrive within two hours of your original arrival time on domestic flights, four hours on international flights, and up to $800 if you’re not rerouted within that time frame.

The rule now covers aircraft seating 30 people or more; it previously covered flights with 60 seats and up. Reimbursement is determined by the price of the ticket, its refundability and the length of the delay. (Source: DOT press release).

DOT, FAA Announce Plans Designed to Ease Congestion
Even though airlines are reducing their domestic capacity, many by as much as five percent, aviation congestion remains a problem.

The Department of Transportation and the Federal Aviation Administration have announced a new routing alternative that will provide an “escape route” into Canadian airspace so that aircraft can fly around summer thunderstorms and high winds. And, the FAA is opening a second westbound route for aircraft, which will provide a parallel route along a heavily traveled corridor, which should cut westbound delays out of New York.

The DOT has also proposed auctioning off a limited amount of slots-the number of flights airlines can operate in a single day-at LaGuardia. The Air Transport Association, an airline trade group, is opposing such market-based solutions, saying that the DOT doesn’t have the authority to institute auctions and congestion pricing and that they are inconsistent with international practices. (Source: DOT, ATA press releases.)

Fare Expert Finds Majority of Airline Attempts to Hike Fares Are ticking
When Delta Air Lines and Northwest Airlines announced their proposed merger, they said that stratospheric oil prices have fundamentally changed the economics of aviation.

Oil prices are fueling mergers and other alliance, bankruptcies (more than a half dozen this spring, with the latest being the premium transatlantic carrier Eos), capacity reductions and ongoing fare hikes.

Rick Seaney, CEO of the airfare monitoring site FareCompare.com, has been tracking airline fare increases and reports that the airlines have attempted 14 price hikes so far this year; nine have been successful.

Virgin Atlantic Adds Second Dulles-London Flight for Summer
Virgin Atlantic has begun a second daily flight between Washington Dulles International and London Heathrow. The flight will operate until October 26. (Source: Virgin Atlantic press release).